The Stock Market Is the Most Divorced It’s Been From the Economy Since 2010

(Bloomberg) -- It’s getting harder to argue that the American economy’s showing signs of trouble, but judging by stocks, things don’t look so well. The divergence is getting to be historic.

Data Friday showed retail sales excluding autos and gasoline grew by more than economists expected in November, prompting Scotiabank Economics to declare -- in all caps -- that “the U.S. consumer is alive and kicking.”

That sent the Atlanta Fed’s fourth-quarter GDP prediction to 3 percent from 2.4 percent. Meanwhile, the S&P 500 careened lower by 1.5 percent and is down 10 percent for the quarter. If the Fed predictor proves accurate and Santa Claus skips Wall Street, it’d be the first time since 2010 that the economy grew by 3 percent and the S&P 500 fell at least 10 percent in the same quarter.

The Stock Market Is the Most Divorced It’s Been From the Economy Since 2010

“It is obvious that the economy is not falling apart nearly as quickly as the markets are implying,” said Neil Dutta, head of U.S. economics at Renaissance Macro Research. “Importantly, consumer confidence is strong, which indicates that strong employment and lower gas prices are offsetting the drop in equity markets.”

©2018 Bloomberg L.P.